Silvermere dives on installation delay

Shares in Silvermere, an independent oil and gas company, dived after the firm announced a delay in production plans for the I-1 Well on its Mustang Island asset located in Texas waters in the Gulf of Mexico.

The operator, Dominion Production Company, made the decision, in consultation with Silvermere, to suspend installation of a new platform on the well until after the end of March 2012 due to adverse weather conditions and the "significant" financial costs likely to be incurred.

It was originally anticipated that the platform would have been ready for installation by 31 October 2011, but delays in construction caused by new deck height specifications and delays from third party suppliers made this impossible.

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The recent weather conditions in the Gulf of Mexico further delayed installation operations and the firm said there is no expectation that conditions will change for the better.

Andy Morrison, Chief Executive of Silvermere, said: "We previously highlighted the weather as being the significant factor that might delay installation and production by the end of 2011.

"Our financial contribution to the project will be deferred whilst the value of our assets is not affected and we have protected the company against the risk and potential cost of excessive near-term weather delays."

The share price fell 21.43% to 16.50p by 08:22.

NR